Airbus secures orders worth $23.5bn in a single day

Purchases at the 2016 Farnborough Air Show take off, with Airbus securing orders worth $23.5bn in one day alone

An Airbus A-380 on display at the Farnborough Air Show. In the first day of this year's show, Airbus secured orders worth $23.5bn from mainly Asian carriers 

The Farnborough Air Show this year is proving to be a huge success for Airbus, with the group closing four deals worth $23.5bn in just one day. The biggest spender on July 12 was AirAsia, with an order for 100 Airbus A321neo airplanes worth $12.57bn. This string of purchases is a continuation of the carrier’s recent activity, having ordered over 500 narrow-body airliners in the last few years alone, thereby becoming Airbus’ biggest customer.

“The A321neo will help us to meet ongoing strong demand as well as further reduce our costs across the group, which will translate to lower air fares for our guests”, said AirAsia CEO Tony Fernandes, according to Business Insider.

The group plans to put their new purchases into operation at airports with infrastructure limitations. Furthermore, by flying the A321neos on AirAsia’s most popular routes, the group hopes to achieve greater passenger volumes, while also supporting smaller airports.

Only one order from a European carrier has been made so far at the show, by Virgin Atlantic for a dozen Airbus A350-1000s

Indian carrier Go Air also added to the momentum of the show by signing an MOU for 72 A320neos in a deal worth around $7.7bn at list prices. Likewise, China’s budget carrier Xiamen Airlines signed an MOU for 30 Boeing 737 MAX 200 airliners, while Chinese rival and relative newcomer Donghai Airlines also revealed its plans to purchase 25 Boeing 737 MAX 8 and five 787-9 Dreamliners, valued at more than $4bn at current prices.

As demonstrated by the orders made during the first two days of the show, the demand for aircraft by Asian players continues to go from strength to strength – a trend that it set to continue. As estimated in Boeing’s Current Market Outlook 2015–2034 report, Asian air carriers will account for around 40 percent of all new aircraft delivered to the region over the next two decades. Further corresponding to this shift in the global market is the fact that only one order from a European carrier has been made so far at the show, by Virgin Atlantic for a dozen Airbus A350-1000s.

Despite the evident appetite for smaller aircraft, particularly from Asian carriers, Airbus continues to struggle with sales of its double-decker A380. As such, the Toulouse-based group revealed at the show that it would be cutting back on deliveries of its super jumbos from 2018, reducing the number to 12 from the 27 it supplied in 2015.